State senator faces sanctions over trail of ethics complaints

Powerful Augusta legislator under renewed scrutiny for business dealings.

Posted: Sunday, January 06, 2002

ATLANTA -- Charles Walker has never been found guilty of any legal or ethical wrongdoing in carrying out his duties as a member of the General Assembly.

That's been the longtime refrain of the Augusta Democrat and Senate majority leader each time fellow politicians or the media have charged that his zeal to make a buck has overwhelmed his legislative proprieties.

But the refrain could change Friday when the State Ethics Commission takes up a complaint accusing Walker of failing to reveal his business connections with medical institutions in Augusta and Atlanta that depend upon the legislature for funding.

If found guilty of violating Georgia's Ethics in Government Act, he could be fined up to $1,000 per offense, possibly a bigger blow to his statewide political aspirations than to his pocketbook.

"He's gotten away with a lot over the years because of his strong political alliances," said George Anderson, a Rome bookstore owner and self-styled ethics watchdog, who has another complaint against Walker pending before the commission. "I hope to see something strong against Senator Walker this time."

The commission voted during a preliminary hearing in November that there was probable cause to believe that Walker had broken the law in his dealings with the Medical College of Georgia and Grady Memorial Hospital. That set the stage for Friday's hearing, during which commissioners will decide whether violations occurred and, if so, what the penalties should be.

Overtures or oversights?

The senator is accused of failing to list on several financial-disclosure reports income his temporary-services company received from the two hospitals. Legislators must detail business they conduct with government agencies.

Walker's lawyer argued that the senator didn't believe he was required to report the Grady income to the state because the Fulton-DeKalb Hospital Authority, which operates the hospital, is a county-government entity.

The attorney, Scott Rafshoon, also told commissioners that Walker's failure to report the income from MCG was an oversight.

The MCG-Grady episode is the latest in a series of alleged improprieties that have dogged Walker throughout his public career, charges that could pose obstacles to his openly expressed ambition to run for statewide office. Among the other examples involving Walker and the companies in which the millionaire businessman has an interest:

* Accusations from a powerful Senate colleague last year that Walker used his influence to stop the creation of a committee to investigate financial operations at Grady.

* A pending federal lawsuit and an ongoing investigation by the Public Service Commission about overcharging the families of state prisoners for telephone service offered through a company a Walker subsidiary contracts with.

* Complaints about a letter he sent to lobbyists in 1999 urging them to do business with his son.

* Allegations in 1995 that Walker lobbied for higher Medicaid payments to companies that do health screenings while his family was qualifying to perform those services.

* An Ethics Committee complaint in 1994 that he cursed and shoved welfare recipients lobbying outside his office.

* Published reports of shoddy work and inflated charges in 1993 by his company over work done for Richmond County.

* A government audit that uncovered questionable accounting practices when he was the executive director of the Augusta-Richmond County Human Rights Commission in 1981.

* And his arrest in 1981 for simple battery to his first wife.

'I'm a rising star'

Although Walker didn't return calls seeking comment for this article, he has often blamed his accusers of political motives.

"I've had all kinds of charges leveled at me because I'm a rising star," he said in April 2000. "When you have statewide or national ambitions, you become a target."

It is also typical of him to complain that reports are one-sided even though he refuses most opportunities to elaborate. In the past, he has denied wrongdoing and has escaped serious punishment.

For example, the Senate Ethics Committee exonerated the Democratic leader in the 1994 and 1995 episodes.

But his current situation may be different because he won't be facing a committee of fellow politicos when he goes before the State Ethics Commission.

In the MCG-Grady case, Walker amended his financial-disclosure reports last September, more than a year after the complaint was filed. He revealed that his company, Georgia Personnel Services Inc., received nearly $1.5 million from Grady and almost $130,000 from MCG.

During the Ethics Commission's November hearing, a former Grady doctor complained that the quality of services deteriorated after Walker's firm won a contract.

"A lot of nurses were forced to leave or told me they just couldn't work under that system anymore," Dr. Samuel Newcom, a retired former chief of hematology at Grady, said during an interview last week.

Grady's former senior vice president of personnel, Joyce Harris, is suing the hospital for discrimination and harassing her after she publicly objected to using Georgia Personnel. She has testified that using his firm cost the hospital hundreds of thousands of dollars.

"We could have saved money had we used our own in-house people," she said. "We had managers who were complaining about the services, and I had to cover for that. ... I was directed to use Senator Walker's company."

Harris eventually complained to media, the FBI and the hospital's accrediting agency.

Two of Walker's Senate colleagues drafted a bill to set up a study of Grady's finances, and the Augusta Democrat was among those voting for it. But the bill stalled in the House, prompting co-author Sen. David Scott, D-Atlanta, to take the unusual step of blasting Walker from the well of the Senate.

"I've tried everything I could do to get my bill passed," Scott said then. "I want the Speaker (Tom Murphy, D-Bremen) to know that those old black people in line at Grady Hospital that are dying in line because they can't get their medicine. They are being held up by senators who have a direct conflict of interest."

Walker denied having anything to do with the bill's delay. And Scott, who is now running for Congress, said he has no comment on Walker now.

Besides the MCG-Grady allegations, the Ethics Commission also is scheduled to hold a hearing Friday on two complaints that Walker's campaign-finance disclosure reports didn't contain enough detail on how he spent his campaign funds during the past several years.

A number of credit-card payments were listed as going toward broad categories such as "travel" or "meals," but didn't explain whether they were campaign-related, Assistant Attorney General Jeff Ledford told commissioners in November.

Walker filed a series of amended reports last month, filling in the details. The expenses may seem minor considering published reports put the combined sales of his companies at more than $20 million yearly, but they could constitute a genuine violation.

For example, on a $502.90 credit-card payment listed in one of his reports from 2000 as going toward lodging and meals, he identified last month as funds spent while on his way home from a state trade mission in Jerusalem.

A spending item of $334.78 listed earlier only as "travel" expenses turned out to be costs incurred on a trip to Hazlehurst, where Walker was the keynote speaker at a convention of an organization known as 101 Black Men.

Bringing the dollars home

The senator contends he simply employs the same behavior as white politicians, helping himself and his friends as he helps his constituents.

In terms of bringing taxpayer money home, he has been very helpful.

He was an early supporter of Roy Barnes' campaign for the Democratic gubernatorial nomination, and, perhaps in return, he received a promise of $30 million for the Augusta Neighborhood Improvement Corporation. Walker is vice chairman of the board, the same panel that signed an exclusive brokerage arrangement with the firm started by his long-time associate Pat Jefferson.

Part of that huge state grant goes to the CSRA Business League -- which is housed in The Walker Group's headquarters building.

Critics said he crossed the line beyond networking in 1995 when he presided over a Medicaid rate increase in the Senate Health and Human Services Committee for health-screening services. At that time his wife, Sheila, had a company called Georgia Health Check Inc. based in The Walker Group building that was seeking a state permit to perform those services.

Walker asked the Senate Ethics Committee for a ruling, and then-Attorney General Michael Bowers concluded no laws were broken. The senator said the company, now dissolved, never did business with the state.

Another unsuccessful effort at networking was in 1994 when he and insurance lobbyist Bob Constantine looked into establishing a small insurance company to provide workers' compensation coverage for his employees. Two years later, the enterprise resulted in a lawsuit over Walker's expectation that he could set up the endeavor for nothing; outside consultants wanted to be paid.

Recently, he said connections played no part in his dealings with the state Department of Corrections, a contract that has made him the subject of a federal lawsuit and another ethics complaint. CresTech, a company that state records show Walker's son and Georgia Personnel helped organize, is a subcontractor with the giant long-distance company WorldCom, which used to be known as MCI. WorldCom has an exclusive, multi-million contract to provide telephone service to the state's thousands of prisoners.

Corrections officials, Walker and WorldCom executives all say CresTech won the subcontract during bidding for minority-owned vendors and played no part in securing the state deal. But Walker has been caught up in the flap over charges WorldCom levied above its published rates.

Public Service Commission staff say WorldCom is issuing credits on bills for the last three months, which will likely settle the matter. An ethics complaint on whether Walker should have disclosed the CresTech deal is due for an initial hearing in coming months.

'This is a pretty political state'

But among all of those examples, only the MCG-Grady case and the two complaints on the vague nature of Walker's campaign-finance reports have gotten this far with the State Ethics Commission, according to Teddy Lee, the commission's executive secretary.

Several commissioners had strong words for Walker during November's preliminary hearing -- particularly Commissioner Richard Yarbrough, who argued that ignorance of the law is no excuse for breaking it.

But Newcom, the former Grady department head, is uncertain whether those statements indicate that the commission is ready to get tough with a politician as powerful as Walker.

"This is a pretty political state, with strings attached to a lot of people," he said.

After all, many of Walker's colleagues have privately admitted to being intimidated by him. Other evidence of his influence, and willingness to use it, comes in the number of causes he undertakes for various special-interest groups needing a legislator who can get things done. The most blatant example was when he helped the Georgia Cemetery Association in the 2000 session.

His work in watering down a bill affecting the industry smacks of a quid pro quo, said Rabun Smith, owner of Heritage Memorial Funeral Home in Warner Robins and past president of the Georgia Funeral Home Association.

"I was told that they went looking for a legislator they could buy, and he's known to be for sale," Smith said at the time.

A letter from Georgia Funeral Home Association Executive Director Freddi Hagin to association members announcing a fund-raiser clearly states that the event was in response to Walker's work on the bill.

"Senator Walker committed to us early on that he would work diligently to help us preserve the industry," the letter states. "NOW IT'S PAY-BACK TIME!!"

Anderson said that even if the Ethics Commission fines Walker, the punishment will be light compared to the sanctions he could have faced if the commission had a greater scope of duties backed by tougher ethics laws.

"Most of what the commission does, investigating violations of election law, does not rise to the level of criminal conduct," said Russ Willard, spokesman for the Attorney General's office.